Nikkei 225 · February 9, 2016
When Negative Rates Backfired
-5.40%
single-day change vs previous close
Part of a longer stretch
When negative rates backfired
near the end of it · 2015-12-01 → 2016-02-12, -25.28% over the whole period
What happened that day?
- 9 February 2016 — Nikkei 225 fell 5.4%, a little over ten days after the Bank of Japan announced negative interest rates
- The intent was clear: charge banks for parking money at the central bank so it would flow into lending and investment instead
- Markets read it differently
- First, negative rates eat directly into bank profitability
- Second, going this far was read as evidence every other tool had failed. That the yen strengthened after an easing announcement supported that reading
- Fell 25.28% from peak — a case of policy working opposite to its intent
Sources
Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.